Bitcoin reached July’s level once again despite positivity we saw on market only few weeks ago
Bitcoin’s drop to $20,000 was an unpleasant but somewhat expected event, as we noted in our market reports, given the lack of growth factors in the industry and the flurry of financial regulators in the US.
Powell’s speech
The catalyst for the current price dive was the speech of the Fed Reserve chairman who stated that the U.S. central bank will remain hawkish for a while, which goes against previous expectations of financial markets that expected a soft landing only a few weeks ago.
Almost every financial asset fell heavily, with bitcoin down 7%, gold down about 1.2% and the US500 down 4%. Narrative With extreme fear, we will most likely see a continuation of the bear trend in the market next week.
Lack of institutional inflows
Even with the recovery of the sentiment among retail traders, the market will not start moving until institutional investors feel like it is time to get back on the cryptocurrency market. In the last two weeks, the market saw nothing but outflows from the industry.
The situation is most likely to change after the end of the rate hike cycle by early 2023.
Absence of growth factors
Lack of institutional support, a strict monetary policy and a lack of events around the first cryptocurrency are inalienable parts of the bear market, which will still go on for quite some time, according to the current macro environment.
The Ethereum merge update is the only thing that can bring new capital to the market, while there is a complete absence of any news, updates and events related to Bitcoin.
